Pat Rabbitte (Dublin South West, Labour)

I propose to take Questions Nos. 5 and 13 together.

I do not have a statutory function in the setting of energy prices, whether in the regulated or unregulated market. Responsibility for the regulation of the electricity and gas markets is a matter for the Commission for Energy Regulation, CER, which is an independent statutory body. Ireland's electricity and gas markets, both wholesale and retail, are characterised by vigorous competition regulated by the CER. Prices in the retail electricity market are now fully deregulated. From 1 October, gas residential consumers will be the only segment of the electricity and gas markets where prices will be regulated. Prices in the electricity market and unregulated part of the gas market are wholly a commercial and operational matter for the suppliers.

The recent CER decision to approve a 21.7% increase in the Bord Gáis tariff from 1 October is the first price increase for Bord Gáis's residential gas customers since September 2008. It follows three successive price cuts approved by the CER. There have also been recent announcements by suppliers of electricity price increases.

The driving factor in these increases, and the point of Deputy Durkan's question, is the trend in international gas prices during the past year, which looks like continuing into the future. Wholesale gas prices for the coming winter will be more than 30% higher than they were last winter. Ireland is a price-taker in the global fossil fuel market and the economy, therefore, is vulnerable to energy price fluctuations and price rises.

Suppliers in neighbouring markets are also subject to similar pressures and price increases. Last May, Phoenix Gas in Northern Ireland announced an increase of 39% in domestic and small business tariffs. The big six gas suppliers in Britain have also increased domestic tariffs by 17% to 18%, following on from increases some months previously.

The Government is committed to competition as a way of exerting downward pressure on prices. Competition is achieving competitive pressure on suppliers. It stimulates them to offer better deals and discounts. Business and domestic customers can, therefore, increasingly avail of the competitive offerings from electricity and gas supply companies active in the retail end of the market. The first step that customers should take to reduce their energy costs is to work actively in securing better value offers in the market and in switching to suppliers delivering lower prices.

Actions taken in the two years prior to the end of 2010 improved Ireland's competitiveness in the gas and electricity sectors when compared with other European countries. Analysis by the Sustainable Energy Authority of Ireland, SEAI, of EUROSTAT data for the second half of 2010 shows that, for large business customers of electricity, Irish prices were between 91 and 93% of the eurozone average while prices for small to medium-sized business customers ranged from 4% below the average to 6% above, depending on the category. Gas tariffs remain competitive with business tariffs at 83% to 90% of the eurozone average. Increased competition has clearly had an impact.

In addition, we must focus on all possible additional actions to mitigate costs where possible for business and domestic customers. This is essential for competitiveness, employment and for economic recovery. I am committed to working with enterprise and with the energy sector to ensure that the costs of energy for business are as competitive as possible through those measures at our disposal. I urge all businesses of whatever size to place a relentless focus on energy efficiency. The SEAI is available to provide advice and, subject to available resources, financial assistance in this respect. In addition, there is extensive tax relief available to businesses.

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